The Top 6 Hidden Recruitment Costs Your Team Should Look At

Unemployment is at its lowest level in 50 years, making hiring difficult for businesses of all sizes. In addition, as firms compete for elite people, hiring expenses are rising.

According to the Society of Human Resources Professionals (SHRM), the average cost per hire in the United States is a little more than $4,700. This can involve, among other things, the prices of purchasing job board posts, paying a recruiter, creating a career site, and screening candidates using background and reference checks.

While the prices listed above can be accounted for as line items in your recruitment budget, many businesses ignore the financial recruitment cost of hiring, which can quickly build up when you have a vacant position.

We’ve highlighted a number of these hidden costs below, along with suggestions through which hiring managers can reduce them and, as a result, increase profitability within the hiring process. Keep reading to learn more about implementing a cost-effective recruitment strategy.

1. Resources and Time Spent on Unsuitable Applicants

Hiring and HR managers frequently spend significant time manually examining each candidate. However, in many cases, time is wasted on candidates who will not be a good fit for open positions or the firm.

Suppose unqualified candidates pass the initial screening process. In that case, they may be invited for interviews, squandering time and resources that you could otherwise spend on tasks that contribute to the company’s profitability.

Using prescreen surveys, your team may automatically send thank-you emails to each applicant while also giving a link to the survey.

Prescreen surveys are just a set of true/false questions that only take a few minutes to finish for candidates. Candidates who do not perform well on the poll are automatically excluded from consideration. As a result, your team will only spend lots of time screening applications that satisfy the minimum requirements for your vacant positions.

Prescreen questionnaires or another automated process before applications reach the hiring manager is one method for your team to prevent wasting time on individuals who aren’t qualified for your open positions. This will also significantly reduce the financial cost of your hiring process.

2. Lost Productivity When There Are Open Positions

Productivity and profitability are lost every day your organization has an open role.

For example, the more time you take to hire employees for your sales positions, the lower margins your organization will convert. And every time one of your divisions is short a team member, other workers are left to pick up the load, causing overall productivity to suffer.

To reduce the risk associated with open positions, your team must employ an effective hiring procedure.

One common low-cost recruitment strategy is to streamline candidate communication using text messaging. While prospects may ignore an email or a phone call, you can reach them faster via text, allowing you to move forward with the hiring stages more swiftly.

3. Time Spent on Training New Personnel

New hires are typically not 100% effective on the first day. Each new hire requires some time to get up to speed between onboarding and learning. And while they’re still at it, your team will begin to drop short in terms of production.

One step your team can undertake to get somehow new employees to participate in your team immediately is to start onboarding before each new employee’s first day. No new employee likes to spend hours on their first day in the HR office filling out paperwork.

Instead of focusing on required paperwork, digital onboarding allows new workers to begin their day-to-day work immediately away.

And it can save your HR team from repeating many of the same onboarding activities with each new worker.

Filling out direct deposit data for payroll, submitting tax forms, filling out perks paperwork, and signing the employee handbook are all onboarding procedures they can perform before the first day.

Employees who read your employee handbook before their start date can learn more about your workplace culture and fundamental values, making them even more eager to join your team.

Employers wanting to hire top talent face obstacles in a tight labor market. In some circumstances, this can result in a lengthy hiring procedure.

Understanding the above-mentioned hidden hiring costs and making prompt efforts to make your hiring more profitable will give you a significant competitive advantage and guarantee you have the strongest team.

4. Onboarding Technology Helps You Save Money

Undoubtedly, there are cost savings to be had by assessing and managing your staff onboarding process more efficiently using technology.

This is especially crucial when hiring individuals who grew up in an email and the Internet. Because nearly everyone nowadays expects to be able to interact quickly and virtually, using online technologies is both practical and familiar.

Three methods to save money by investing in onboarding technology:

• Save HR team time and resources by shortening the time and effort required to issue agreements and onboard new employees.
• Avoid losing personnel during the recruiting process and save money on additional and repetitive recruitment fees.
• Save money by shortening the time it takes a new employee to become productive for your company.

Onboarding technologies can aid in the process of converting recruitment offers into effective workers. And it can make a significant difference to your company’s bottom line. Reduced recruitment expenses, candidate attrition, and more optimal use of HR personnel could result in cost reductions for your company.

5. Hiring the Wrong Person Altogether

This may have the most significant influence on the company. The impact of the time lost for those involved, the added costs of recycling the recruitment process, and considerable productivity losses can all be quantified. Unnecessary costs might easily exceed $100,000. While these costs are more visible, what is the cost to your organization of morale, employee dissatisfaction, performance, client dissatisfaction, and so on?

By delving further into your recruiting budget, you can determine your exact costs.

6. The Cost of Squandered Opportunities

It takes the same time and resources to make an offer that results in an employee as it does to make an offer that does not result in an employee—making sure that you can convert 100 percent of your requests into productive workers as efficiently as feasible will save your company a lot of time and money.

Most businesses accept recruitment charges assuming they would repay their investment by obtaining qualified candidates. However, a study shows that 27% of workers who quit a new job within the first year do so during their induction time. That scarcely provides businesses enough time to reap the benefits of hiring a new employee.

Companies that successfully organize and manage the onboarding process can minimize some of these avoidable costs. 

Can Your Company Afford Not to Know Its True Recruitment Cost?

One way that we are helping companies and recruiters is by offering the Recruiter.com Shortlist.  We will send you ten hand-reviewed candidates in just ten days, and it’s only one charge without a recurring subscription. This can help you avoid the large headhunting fees.

You can contact Recruiter.com to learn more about our Shortlist along with the other solutions that we offer to help companies lower their hiring costs.

 

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